3 invoices about the Wirral Waters Section 106 agreement with Peel which raises a VAT question?

3 invoices about the Wirral Waters Section 106 agreement with Peel which raises a VAT question?

3 invoices about the Wirral Waters Section 106 agreement with Peel which raises a VAT question?

                                                    

I’d better start this piece by declaring an interest in that I can see the Wirral Waters site from where I live as it’s not that far away.

Below are three invoices that however many times I look at them don’t make much sense to me. However maybe through writing about them I can make more sense of them. I may have this wrong, so if I have please leave a comment as elements from one invoice appear on the other ones so maybe I’m not counting things correctly.

All three are from Eversheds LLP (a firm of solicitors) with an office in Manchester. I’ll put them in chronological order:

20/2/13 Interim Invoice | Wirral Waters Section 106 agreement (to November 2012) | £10,000 + VAT £2,000 = £12,000 | £10,000 paid by Peel Land and Property (Ports) Limited | £2,000 paid by Wirral Council (VAT element)

15/4/13 Interim Invoice | Wirral Waters Section 106 agreement (to November 2012) | £8,133.90 + VAT £1,617.58 = £9,751.48 | £8,133.90 paid by Peel Land and Property (Ports) Limited | £1,617.58 to be paid by Wirral Council (VAT element)

29/4/13 Invoice | Wirral Waters Section 106 agreement (28 June 2011 to 31 July 2012) | £8,000 + VAT £1,577.20 = £9.577.20 | £8,000 paid by Peel Land and Property (Ports) Limited | £1,577.20 to be paid by Wirral Council (VAT element)

Total (across three invoices) paid by Peel Land and Property (Ports) Limited: £10,000 + £8,133.90 + £8,000 = £26,133.90
Total (across three invoices) paid by Wirral Council : £2,000 + £1,617.58 + £1,577.20 = £5,194,78

Which leads me to the obvious question about VAT. When a developer such as Peel Land and Property (Ports) Limited have a legal firm (in this case Eversheds) to draw up a section 106 agreement between themselves (Peel Land and Property (Ports) Limited) and Wirral Council, why does Wirral Council pay the VAT?

I’m not an accountant, so maybe somebody out there with a better understanding of the tax code and VAT issues can help me! Please leave a comment if you understand this better than me!

Wirral Waters section 106 agreement interim invoice Wirral Council 20th February 2013 £12000
Wirral Waters section 106 agreement interim invoice Wirral Council 20th February 2013 £12000
Wirral Waters section 106 agreement interim invoice Peel Land and Property (Ports) Limited 15th April 2013 £9751 48p
Wirral Waters section 106 agreement interim invoice Peel Land and Property (Ports) Limited 15th April 2013 £9751 48p
Wirral Waters section 106 agreement invoice Wirral Council 29th April 2013 £9577 20p
Wirral Waters section 106 agreement invoice Wirral Council 29th April 2013 £9577 20p

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